The G7's latest agreement to set a price cap on Russian crude will likely lead to a rise in oil prices to $125 a barrel, according to Goldman.
The bank warned on Friday that a price cap would be bearish in theory and bullish in practice due to the possibility of Moscow cutting exports to G7 countries.
Russia could retaliate by cutting G7 buyers off and shutting in production in order to raise global prices and its own revenues even higher. Our bullish forecast for oil prices is unaffected by today's announcement.
A price cap on Russian oil will be implemented by the G7 by December 5.
Finance ministers hope the cap will reduce Russia's income from crude exports without cutting off western countries from a major energy source.
Goldman said that a price cap would likely work differently in practice, with Russia likely to hit back.
Courvalin's team said that a price cap would allow Russian oil to flow while at the same time limiting European oil export revenues. The policy is at risk of being turned into an additional bullish shock for the oil market if Russia retaliates.
Europe's natural gas markets were upended by Russia. Benchmark prices have soared over 200% since June because of halted gas flows.
France's energy transition minister accused Moscow of using gas as a weapon of war last week, as European officials accused Russia of trying to stoke an economic crisis.
Russia will stop exporting oil to countries that try to impose a price cap, according to the Kremlin.
The countries that join the price cap will no longer receive Russian oil. We will not cooperate with them when it comes to oil on non- market principles.
West Texas Intermediate crude was up 2.5% to just over $90 a barrel at last check.
Russia has slowed the flow of gas to Europe to a trickle.
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